The Real Flash-Crash Culprits

It's wrong to blame a single mutual-fund complex for May's sudden market plunge. Brokerage houses did plenty to worsen the damage.

MEET THE FLASH-CRASH scapegoat. A report by regulators blamed May's spectacular market break on a single trade by a single "mutual fund complex" identified in the press as Waddell & Reed.

This was as ludicrous as blaming Mrs. O'Leary's cow rather than lax building codes for the Great Chicago Fire. The official explanation of the May 6 tumult, which saw the Dow plunge by nearly 1,000 points before largely recovering,...